15 June 2001

Veg operation expands into processing field

Meeting market demand is

the name of the game

throughout arable farming,

but nowhere more so than in

field veg. Edward Long

reports on the latest plans

of one the nations key

innovators in the sector

BY investing over £6m in a new vegetable packing and processing factory, an East Anglian-based family-owned farming company is cutting a link from the supply chain and opening up new markets.

Scheduled to have an annual turnover of £20m within three years, it is an add-on business to Frederick Hiams core farming operations, which include 3678ha (9090 acres) in East Anglia and south Wales.

While farming has always been, and will continue to be, a core activity, the company recognises that in an increasingly competitive environment diversification into food processing to add value to produce is needed for improved and more consistent long-term returns.

"To achieve this we decided to construct a food processing factory at Brandon," says commercial director Derek Little. "At 77,000sq ft it is one of the biggest purpose built units handling vegetables."

Trading as Frederick Hiam Foods, the new venture is being opened in two phases. Phase one, costing £5m, will allow the company to wash, grade, slice, peel and pack ready-to-cook a range of vegetables.

When the factory opens for business later this month, it will initially handle carrots and potatoes. Parsnips will come on stream in early August, just ahead of onions.

Phase two, which requires a further £1.3m investment, will turn out ready cooked vegetables and is due to be operational next March when produce from all over the UK – including swedes from Scotland or Cornwall and sweetcorn from the West Country – will be trucked to Brandon.

The aim is to get away from the cycle of feast-to-famine associated with existing supply chain arrangements in which farmers send produce to a third party packer, says Mr Little.

"By cutting out the middleman we will be closing the gap between plough and plate, which will allow us to have more control over our destiny."

The new factory will supply major multiple retailers, commercial canteens and institutions such as prisons, hospitals and schools. Top-end value added lines will go for airline meals and event catering.

This year the company farms expect to produce 20,000t of potatoes, 16,000t onions, 12,000t carrots and 6000t of parsnips. But this will be insufficient to keep the new factory busy, so the firm has entered into full risk/benefit sharing partnerships with several local farming businesses with the aim of providing them with more "hands-on" control of their produce after it leaves the farm gate.

They will be full partners and not just vegetable suppliers, says Mr Little.

The shorter supply chain provides improved traceability and by adding value to both ends of the market growers should get higher returns and the end-use customer a better deal.

A strong desire to meet consumer demands for ever greater convenience is the driving force behind the £6m-plus development of the Frederick Hiam business, says commercial director Derek Little.

HIAMVEGEXPANSION

&#8226 Demand for value-added products.

&#8226 New-look for potatoes and parsnips.

&#8226 Accompaniment vegetables new growth area.

&#8226 Assurance and full traceability provided.

&#8226 Phase one investment in vegetable processing factory £5m.

&#8226 Phase two investment of £1.3m planned.

&#8226 Production partnerships with local large-scale vegetable producers.